CHANGE IN CONTROL, CONFIDENTIALITY AND NON-COMPETE AGREEMENT
Exhibit
10.20
CHANGE
IN CONTROL,
CONFIDENTIALITY
AND
NON-COMPETE AGREEMENT
This
Agreement is made as of November
12, 2007 (the “Effective Date”), between Greater Community Bank (the “Bank”), a
New Jersey commercial banking corporation, Greater Community Bancorp (“GCB”), a
New Jersey business corporation (hereinafter collectively referred to as “the
Company”) and Xxxxxxxx Xxxxxx (the “Executive”).
WHEREAS,
it is anticipated the Executive will
be a valued employee of the Company; and
WHEREAS,
the Company desires to enter into this
Agreement with the Executive to provide the Executive with contractual
assurances to induce the Executive to remain as an employee of the Company
notwithstanding the possibility, threat or occurrence of a Change in Control
(as
defined below) of the Company, provided that the Executive remains in the
position of Chief Lending Officer at the time of a Change in Control;
WHEREAS,
the Company desires to enter into this
Agreement with the Executive regarding obligations of confidentiality and
competition during and following employment;
NOW,
THEREFORE, in consideration of
the mutual
covenants and agreements contained herein and Company’s employment of Executive
as an at-will employee, the Executive and the Company agree as follows:
1.
Duties. The
Company hereby
employs Executive, on an at-will basis, as Chief Lending Officer with all powers
and authority as are customary to this position, and Executive hereby accepts
employment with the Company. Executive shall have such executive
responsibilities as is customary with this position and as the Company’s Board
of Directors shall from time to time assign to her. Executive agrees
to devote her full time (excluding annual vacation time), skill, knowledge,
and
attention to the business of the Company and the performance of her duties
under
this Agreement.
2.
Change-In-Control.
a.
Change-In-Control
defined. As
used in this Agreement, a “Change in Control” means:
(1)
the acquisition by any person (other than GCB) of ownership or power to vote
more than thirty three and one third percent (33⅓%) of GCB’s or the
Bank’s voting stock;
(2)
the acquisition by any person (other than GCB) of the control of the election
of
a majority of GCB’s or the Bank’s directors;
(3)
the exercise of a controlling influence over the management or policies of
GCB
or the Bank by any person (other than GCB) or by persons acting as a group
within the meaning of §13(d) of the Securities Exchange Act of 1934; or
(4)
during any period of two consecutive years, individuals who at the beginning
of
such two (2) year period constitute the Board of Directors of GCB (the “Company
Board”) (the “Continuing Directors”) cease for any reason to constitute at least
two-thirds (⅔) thereof,
provided that any individual whose election or nomination for election as a
member of the Company Board was approved by a vote of at least two-thirds (⅔) of the
Continuing Directors then in office shall be considered a Continuing
Director.
It
is the
understanding of the parties that the merger or consolidation of the Bank with
one or more banking subsidiaries of GCB shall not be considered a “Change in
Control” for purposes of this Agreement.
b.
“Person”
defined. As
used
in this Agreement, the term “person” means an individual (other than the
Executive), corporation, partnership, trust, association, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization or any other form
of
entity not specifically listed herein.
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c.
“Just
Cause”. As used
in this Agreement,“Just Cause” shall exist when there has been a
determination by GCB’s or the Bank’s Board of Directors in its sole
discretion that there shall have occurred one or more of the following events
with respect to the Executive:
(1)
dishonesty arising from or relating to Executive’s position;
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(2)
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willful
commission of an act that causes or that probably will cause economic
damage to the Company or injury to their business reputation arising
from
or relating to Executive’s position;
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(3)
misconduct arising from or relating to Executive’s position;
(4)
breach of fiduciary duty;
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(5)
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failure
to perform stated duties;
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(6)
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violation
of any law, rule or regulation (other than traffic violations or
similar
offenses) or final cease and desist order; or
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(7)
breach of any provision of this Agreement.
d.
Involuntary
Termination After Change in Control. Notwithstanding any
provision herein to the contrary, if, in connection with or within twelve (12)
months after any “Change in Control” of the Company, the Executive’s employment
under this Agreement is terminated by the Company without the Executive’s prior
written consent and for a reason other than Just Cause, the Executive shall
be
paid an amount equal to two (2) times her base annual salary, less that amount
of base salary actually paid after the Change in Control and subject to ordinary
tax withholdings, provided Executive executes a waiver and release agreement
regarding employment related claims in a form satisfactory to the Company;
however, Executive will not receive this payment if the Company was placed
in
conservatorship or receivership in connection with such Change in Control and
the Board of Directors of the Company determines in good faith that the Change
in Control was directed by or otherwise required by the FDIC. In no
event, may the aggregate amount payable hereunder equal or exceed the difference
between (i) the product of 2.99 times the Executive’s “base amount” as defined
in Section 280G(b)(3) of the Code and regulations promulgated thereunder, and
(ii) the sum of any other parachute payments (as defined under Section
280G(b)(2) of the Code) that the Executive receives on account of the change
in
control. Such amount shall be paid in a lump sum, less applicable tax
withholdings within ten (10) days of the effective date of the waiver and
release agreement.
e.
Voluntary Termination
After Change in Control. Notwithstanding any other provision
of this Agreement to the contrary, the Executive may voluntarily terminate
his
employment under this Agreement within twelve (12) months following a Change
in
Control of GCB or the Bank if “Good Reason” for such termination exists that is
not corrected within 30 days following written notice thereof to the Company
by
the Executive, such notice to state with specificity the basis upon which Good
Reason exists. In the event, Good Reason exists and it is not
corrected, the Executive shall thereupon be entitled to receive the payment
described in Paragraph 2(d) of this Agreement once again provided that Executive executes
waiver
and release agreement regarding employment related claims in a form satisfactory
to the Company; however, Executive will not receive this payment if the
Company was placed in conservatorship or receivership in connection with such
Change in Control and the Board of Directors of the Company determines in good
faith that the Change in Control was directed by or otherwise required by the
FDIC. For purposes of this Agreement, “Good Reason” shall mean,
unless done with the consent of the Executive, the assignment of duties
materially inconsistent with the Executive’s position as the Chief Lending
Officer or her duties and responsibilities immediately prior to the Change
in Control; or a material reduction in the Executive’s base salary as in effect
at the time of the Change in Control; or the Company’s requiring the Executive
to be based anywhere other than within thirty (30) miles of the Executive’s
office location at the time of the Change in Control, except for required travel
on the Company’s business to an extent substantially consistent with the
Executive’s business travel obligations for her position.
f.
Tax
Issues. In the
event that the severance benefits payable to the Executive under this section
or
any other payments or benefits received or to be received by the Executive
from
the Company (whether payable pursuant to the terms of this Agreement, any other
plan, agreement or arrangement with the Company) or any corporation
(“Affiliate”) affiliated with the Company within the meaning of Section 1504 of
the Internal Revenue Code of 1986, as amended (the “Code”), in the advice of tax
counsel selected by the Company and reasonably acceptable to the Executive,
constitute “parachute payments” within the meaning of Section 280G(b)(2) of the
Code, such severance benefits shall be reduced to an amount the present value
of
which (when combined with the present value of any other payments or benefits
otherwise received or to be received by the Executive from the Company
(or an Affiliate) that are
deemed “parachute payments”) is equal to $1 less than the total amount permitted
under Section 280(b)(2) without triggering such tax, notwithstanding any other
provision to the contrary in this Agreement. The severance benefits
shall not be reduced to the extent that (A) the Executive shall have effectively
waived her receipt or enjoyment of any such
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payment
or benefit which triggered the
applicability of this section, or (B) in the opinion of tax advisor, the
severance benefits (in their full amount or as partially reduced, as the case
may be) plus all other payments or benefits which constitute “parachute
payments” within the meaning of Section 280G(b)(2) of the Code are reasonable
compensation for services actually rendered, within the meaning of Section
280G(b)(4) of the Code, and such payments are deductible by the
Company. The Base Amount shall include every type and form of
compensation includable in the Executive’s gross income in respect of her
employment by the Company (or an Affiliate), except to the extent otherwise
provided in temporary or final regulations promulgated under Section 280G(b)
of
the Code. For purposes of this section only, a Change in Control
shall have the meaning of a “change in ownership or control” as set forth in
Section 280G(b) of the Code and any temporary or final regulations promulgated
thereunder. The present value of any non-cash benefit or any deferred
cash payment shall be determined by the Company’s independent auditors in
accordance with the principles of Sections 280G(b)(3) and (4) of the
Code.
In
the event that Section 280G, or any
successor statute, is repealed, this Section shall cease to be effective on
the
effective date of such repeal. The parties to this Agreement
recognize that regulations or interpretations under Section 280G of the Code
may
affect the amounts that may be paid under this Agreement and agree that, upon
issuance of such regulations or interpretations, this Agreement may be deemed
modified as in good faith deemed necessary in light of the provisions of such
regulations to achieve the purposes of this Agreement, and that consent to
such
modifications shall not be unreasonably withheld.
3.
Confidentiality
of Information.
a.
As used herein, the term “Confidential Information and Materials” refers to all
information which derives independent economic value from not being generally
known outside the Company and belongs to, is used by or is in the
possession of the Company, including without limitation information
concerning the Company’s products, strategic plans, pricing, cost data
and cost structures, training methods and programs, Executive performance and
compensation information, computer pass wording, recruiting, know-how, research
and development, operation or financial status of the Company, the names or
addresses of any of the Company’s customers, borrowers and depositors, any
information concerning or obtained from such customers, borrowers and depositors
and other confidential technical or business information and data and any
background data that suggest any of the foregoing plans and programs.
Confidential Information shall not include any information that the Executive
can demonstrate is in the public domain by means other than disclosure by the
Executive, but shall include non-public compilations, combinations or analyses
of otherwise public information.
b.
Executive hereby acknowledges that all of the Confidential Information and
Materials are and shall continue to be the exclusive proprietary property
of the Company, whether or not prepared in whole or in part by the
Executive and whether or not disclosed to or entrusted to the custody of the
Executive. Executive further acknowledges that all Confidential Information
and
Materials (to which Executive will have access or which Executive will learn
during the Executive’s employment) will be disclosed to Executive solely by
virtue of the Executive’s employment with the Company and solely for
the purpose of assisting Executive in performing the Executive’s duties
for the Company.
c.
The Company will as part of the employment of Executive make available
Confidential Information and Materials as defined above, provided that Executive
agrees that Executive will not, either during the course of the Executive’s
employment with the Company or for two (2) years thereafter, disclose
any Confidential Information or Materials of the Company, in whole or in part,
to any person or entity outside The Company, for any reason or purpose
whatsoever, unless the Company shall have given its written consent to such
disclosure. Executive further agrees that the Executive shall not during the
period set forth above use in any manner other than for and in the course of
Executive’s furtherance of the Company’s business, any Confidential Information
or Materials of The Company for Executive’s own purposes or for the benefit of
any other person or entity except the Company, whether such use consists of
the
duplication, removal, oral use or disclosure, or the transfer of any
Confidential Information or Materials in any manner, or such other unauthorized
use in whatever manner, unless the Company shall have given its prior written
consent to such use. The restrictions set forth in this paragraph are in
addition to and not in lieu of any obligations of Executive provided by law
with
respect to the Company’s Confidential Information and Materials, including any
obligations Executive may owe under statutes governing trade secrets.
4.
Non-competition
and Inventions.
a.
During
the period of employment of
Executive and for a period of one year after Executive’s termination of
employment for any reason, Executive shall not directly or indirectly:
(i)
Be
employed
by, engaged in or participate in the ownership, management, operation or control
of, or act in any advisory or other capacity for, any Competing Entity which
conducts its business within the Territory (as the terms Competing Entity and
Territory are hereinafter defined); provided, however, that notwithstanding
the
foregoing, Executive may make solely passive investments in any Competing Entity
the common stock of which is “publicly held”
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and
of
which Executive shall not own or control, directly or indirectly, in the
aggregate securities which constitute 5% or more of the voting rights or equity
ownership thereof;
(ii)
solicit or divert any business or any customer from the Company or assist any
person, firm or corporation in doing so or attempting to do so;
(iii)
cause or seek to cause any person, firm or corporation to refrain from dealing
or doing business with the Company or assist any person, firm or corporation
in
doing so; or
(iv)
solicit for employment, or advise or recommend to any other person that they
employ or solicit for employment or retention as an employee or consultant,
any
person who is an employee of, or exclusive consultant to, the Company.
For
purposes of this Section, the term “Competing Entity” shall mean any entity
which is a bank holding company, bank, savings association or mortgage company,
or which is presently or hereafter engaged in the business of offering products
or services competing with those offered by the Company or any of its banking
subsidiaries in Passaic County and Bergen County, New Jersey. The
term “Territory” shall mean Passaic County and Bergen County, New
Jersey. Notwithstanding
anything in the above to the contrary, Executive may engage in the activities
set forth in Section 4(a)(i) hereof with the prior written consent of the
Company. In determining whether a specific activity by Executive for
a Competing Entity shall be permitted, the Company will consider, among other
things, the nature and scope of i) the duties to be performed by Executive,
and ii) the business activities of the Competing Entity at the time of
Executive’s proposed engagement by such entity.
b.
Executive acknowledges and agrees that the covenants set forth in this Section
are founded on valuable
consideration and are reasonable and necessary in all respects for the
protection of the Company’s legitimate business interests (including without
limitation the Company’s confidential, proprietary information and trade secrets
and client good-will, which represents a significant portion of the Company’s
net worth and in which the Company has a property
interest). Executive acknowledges and agrees that, in the event that
he breaches any of the covenants set forth in this Section, the Company may
be
irreparably harmed and may not have an adequate remedy at law; and, therefore,
in the event of such a breach, the Company shall be entitled to injunctive
relief, in addition to (and not exclusive of) any other remedies (including
monetary damages) to which the Company may be entitled under law. If
any covenant set forth in this Section is deemed invalid or unenforceable for
any reason, it is the Parties’ intention that such covenants be equitably
reformed or modified to the extent necessary (and only to such extent to) render
it valid and enforceable in all respects. In the event that the time
period and geographic scope referenced above is deemed unreasonable, overbroad,
or otherwise invalid, it is the Parties’ intention that the enforcing court
shall reduce or modify the time period and/or geographic scope to the extent
necessary (and only to such extent necessary) to render such covenants
reasonable, valid, and enforceable in all respects.
c.
The
Executive hereby sells, transfers
and assigns to the Company the entire right, title and interest of the Executive
in and to all inventions, ideas, disclosures and improvements, whether patented
or unpatented, and copyrightable materials, made or conceived by the Executive,
solely or jointly, or in whole or in part, during the period Executive is bound
by this Agreement which (i) relate to methods, apparatus, designs, products,
processes or devices sold, leased, used or under construction or development
by
the Company or any subsidiary or (ii) otherwise relate to or pertain to the
business, functions or operations of the Company or any subsidiary, or (iii)
arise (wholly or partly) from the efforts of the Executive during the Term
hereof in connection with her performance of her duties
hereunder. The Executive shall communicate promptly and disclose to
the Company, in such form as the Company requests, all information, details
and
data pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and, whether during the term hereof or thereafter, the Executive
shall execute and deliver to the Company such formal transfers and assignments
and such other papers and documents as may be required of the Executive to
permit the Company to file and prosecute the patent applications and, as to
copyrightable material, to obtain copyright thereon. This provision
does not relate to any invention for which (i) no equipment, supplies,
facilities or trade secret information of the Company was used and which was
developed entirely on the Executive’s own time and which does not relate (A)
directly to the business of the Company, or (B) to the Company’s actual or
demonstrably anticipated research or development; or (ii) does not result in
any
work performed by the Executive for the Company.
5.
Miscellaneous.
a.
This
Agreement shall be governed by and
construed in accordance with the internal laws of the State of New Jersey,
without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement executed
by
the parties hereto or their respective successors and legal
representatives.
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b.
All
notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If
to the Executive, to her address
appearing on the records of the Company.
If
to the Company:
Greater
Community Bank
00
Xxxxx Xxxx.
Xxxxxx,
Xxx
Xxxxxx 00000
or
to such other address as either party
shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually
received by the addressee.
c.
The
invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
d.
The
Company may withhold from any
amounts payable under this Agreement such federal, state, local or foreign
taxes
as shall be required to be withheld pursuant to any applicable law or
regulation.
e.
The
Executive’s or the Company’s failure
to insist upon strict compliance with any provisions hereof or any other
provision of this Agreement or the failure to assert any right the Executive
or
the Company may have hereunder, including, without limitation, the right of
the
Executive to terminate employment for cause pursuant to this Agreement, shall
not be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
f.
The
Executive and the Company
acknowledge that the employment of the Executive by the Company is “at will” and
the Executive’s employment may be terminated by the Company or Executive at any
time for any reason, in which case the Executive shall have no further rights
under this Agreement but her obligations under it shall continue.
g.
This
Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all
of
which together shall constitute one and the same instrument.
h.
If
the Company sells, leases, exchanges
or otherwise disposes of, in a single transaction or series of related
transactions, all or substantially all of its property and assets, or if the
Company ceases to exist as a separate entity as a result of a merger or
otherwise, then the Company will, as a condition precedent to any such
transaction, cause effective provision to be made so that the person or entity
acquiring such property and assets or succeeding to the business of the Company
as the surviving entity of a merger or otherwise, as applicable, becomes bound
by, and replaces the Company under, this Agreement.
6.
Injunctive
Relief. Executive acknowledges
and
agrees that irreparable injury will result to the Company in the event Executive
breaches any covenant contained in this Agreement and that the remedy at law
for
such breach will be inadequate. Therefore, if Executive engages in
any act in violation of the provisions of this Agreement, the Company shall
be
entitled, in addition to such other remedies and damages as may be available
to
it by law or under this Agreement, to injunctive or other equitable relief
to
enforce the provisions hereof.
7.
Waiver. In
exchange for the
eligibility to receive the benefits provided in this Agreement, Executive hereby
waives any and all claims Executive may have or assert against the
Company and/or its employees, affiliates, directors and agents (the “Released
Parties”), whether known or unknown, asserted or unasserted, arising out of your
employment with the Company and based on any fact or circumstance existing
as of
the effective date of this Agreement, including (without limitation) all claims
against any Released Party based on any express or implied contract, any state
or federal Constitutional provision, any government regulations, any tort,
any
common law of any state, and any waivable right or benefit provided by any
federal, state, or local discrimination or employment law or statute (including
the Age Discrimination in Employment Act, Title VII of the Civil Rights Act
of
1964, the Americans with Disabilities Act, the Family and Medical Leave Act,
the
New Jersey Law Against Discrimination, the New Jersey Family Leave Act, and
the
New Jersey Conscientious Employee Protection Act). Executive is
hereby advised to consult with an attorney before signing this
document. Executive has up to twenty-one (21) days from the date
Executive received this document to consider this offer. If Executive
chooses to sign the Agreement, Executive will have an additional seven (7)
days
following the date of Executive’s signature to revoke the Agreement and the
Agreement shall not become effective or enforceable until the revocation period
has expired. Any revocation must be in writing and must be received
by the Bank within the seven (7) day revocation period.
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IN
WITNESS WHEREOF, the parties hereto
have executed this Agreement on the date first above written.
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GREATER
COMMUNITY BANK
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By:
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/s/
Xxxxxxx X. Xxxxx, Xx
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Xxxxxxx
X. Xxxxx, Xx.
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Chairman,
President and
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Chief
Executive Officer
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EXECUTIVE
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/s/
Xxxxxxxx Xxxxxx
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Xxxxxxxx
Xxxxxx
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Executive
Vice President,
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Chief
Lending Officer
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